2017 (5) TMI 1536 - AT - Service Tax

Man Power Recruitment and Supply Agency Service - the appellant had supplied/deployed the manpower in the factory premises of its client - Held that - Since the essence of contract is execution of the assigned work and control over the workman and supervision was always with the appellant, it cannot be said that the activities undertaken by the appellant falls under the category of Manpower Recruitment and Supply Agency Service , for levy of service tax - the documents available on records show that the service receiver M/s. Super Iron and Steel Ltd. has paid for the lump sum amount for the contract executed by the appellant. Thus, the appellant cannot be considered as Manpower Recruitment or Supply Agency inasmuch as the deployment of the labour/workforce was for the execution of the job by itself and not by its client - appeal allowed - decided in favor of appellant.

Summary

Issues: Classification of taxable service under "Man Power Recruitment and Supply Agency Service"

Analysis:
The appeal was against an order passed by the Ld. Commissioner (Appeals-I), Customs and Central Excise, Raipur, regarding the classification of taxable service under "Man Power Recruitment and Supply Agency Service." The appellant failed to appear for the hearing, and only the ld. DR for Revenue was present. The dispute revolved around services provided by the appellant to M/s. Super Iron and Steel Pvt. Ltd, Raipur, during the period 4/2004 to 10/2007 under the category of "Man Power Recruitment and Supply Agency Service."

The impugned order highlighted that the appellant had supplied/deployed manpower for various jobs related to production and maintenance of furnace at the client's factory premises. The bill mentioned in the order detailed charges for handling and finishing activities, among others. The appellant's activities included unloading raw material, moving it to different locations, sorting, and cutting material as per requirements. The essence of the contract indicated that the appellant had control and supervision over the workmen, negating the classification under "Manpower Recruitment and Supply Agency Service" for service tax purposes.

The documents revealed that the service receiver paid a lump sum amount for the contract executed by the appellant. The Tribunal concluded that since the deployment of labor was for executing the job by the appellant itself and not by the client, the appellant could not be considered a Manpower Recruitment or Supply Agency. Consequently, the Tribunal found no merit in the impugned order and allowed the appeal in favor of the appellant, setting aside the previous decision. The cross appeal was also disposed of accordingly.

In summary, the Tribunal's decision focused on the nature of the appellant's activities, control over the workmen, and the contractual arrangements to determine the classification of the service provided. The judgment clarified that the appellant's role did not align with the criteria for being classified as a Manpower Recruitment or Supply Agency, leading to the appeal being allowed in favor of the appellant.